There will be no Australian-grown rice on supermarket shelves by December according to the company that produces 98 per cent of the domestic rice harvest.
But ASX-listed SunRice says if governments intervened in the water market, subsidise the cost of water, or change the Murray Darling Basin Plan so that water intended to go to the environment can instead be used to grow rice, it will guarantee Australian-grown rice returns to supermarket shelves in April 2021.
Australians consume about 300,000 tonnes of rice each year and half of that is typically imported.
The company has told state and federal governments if rice growers were provided with 200 gigalitres of irrigation water in southern New South Wales, it would produce 180,000 tonnes of rice to meet domestic demand next year.
Almost all of the rice grown in Australia comes from the NSW Riverina where farmers have had little or no access to irrigation water for the past two years and domestic rice production has fallen from 800,000 tonnes in 2017 to about 54,000 tonnes last year.
Due to the coronavirus pandemic and fearing a third consecutive year without a water allocation in southern NSW, SunRice chairman Laurie Arthur met with commonwealth and NSW politicians to present “many different scenarios” that he believed would provide farmers with enough water to meet the domestic rice demand.
One scenario included using South Australia’s desalination plant to provide water for Adelaide, freeing up water upstream so farmers could grow rice — a readjustment of the Federal Government’s water for fodder program which uses the water to grow feed for drought-affected livestock.
But speaking with the ABC, Mr Arthur did not elaborate on the details, legality or cost of his proposals.
Asked if the farmers or SunRice would pay for the water, Mr Arthur said: “That might be the case, we’ve talked about borrows, we’ve talked about all sorts of things.”
Despite trading in more than 50 countries around the world, Mr Arthur said SunRice could guarantee all rice grown under the company’s proposal would stay in Australia, something he argued was increasingly important during the pandemic.
“We’re not talking about us being allocated water for rice every year, we’re saying at the moment there’s a specific problem,” Mr Arthur said.
“What we’re seeing with COVID is that there’s a very significant number of people that for example rice is their primary staple, they want access to it all the time, they don’t want to go into a supermarket like its Moscow in the 1980s.”
Mr Arthur said there was no risk Australians would go hungry, but the pandemic has created some “turmoil in global rice trade” with at least three rice growing nations restricting exports.
Water ministers point to each other, hope for rain
Federal Water Minister Keith Pitt said he was hopeful more rain in Murray Darling Basin catchments would increase the amount of water available to growers.
“If there is available water somewhere, which I could do with the click of my fingers, I would have done it already, but you can’t take water from one part of the basin and put it somewhere else without it impacting someone,” Mr Pitt said.
However, Mr Pitt said that New South Wales had a “strong opportunity in its emergency reserves” to provide more water for farmers.
New South Wales Water Minister Melinda Pavey said the Australian rice industry was at risk of collapse and called on the Commonwealth to underwrite an opening water allocation for irrigators in southern NSW.
“NSW is already shaking every bucket to see what we have left in our coffers to give our producers to stop the collapse of these industries,” Ms Pavey said.
SunRice’s call follows a report by Mick Keelty that said: “Trading environmental water can only be undertaken on the open water market when water is excess to requirements and there is no risk to the environment …. and … that is not generally the case during a drought”.
Another recent report into Australian food security “found government intervention to provide additional water to a particular sector or producer would need to come from another user, such as reserves held to ensure future town supply or environmental outcomes, or water that would have been used for a more profitable sector, reducing the gross value of irrigated production”.
The report also forecast a rice harvest of 180,000 tonnes in 2020-21, noting more than half of that would typically be exported.
Water policies and trade has compounded impact of drought: SunRice
Mr Arthur said in his briefings with politicians he was clear that it was not just drought and coronavirus affecting the SunRice business.
He said water policies such as the Murray Darling Basin Plan and water trading, which has allowed water to be traded away from traditional crops like rice to higher value crops like nuts, have devastated the rice industry.
“We’re just alerting government and the public that we’re having under water reform, and combined that with drought, we’re having trouble providing that to Australian consumers.”
“This isn’t a [call to] ‘come and help us government’.
Mr Arthur said if SunRice could not produce a domestic harvest, it would “do our best” to import rice to meet Australian consumer demand.
If governments could provide the water under the scenarios presented, he said it would be distributed among the company’s growers at the discretion of Mr Arthur and the SunRice board.